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HomeMy WebLinkAboutAGENDA REPORT 2007 1107 CC REG ITEM 10I rrEM City Council Meei-.w; Of // Taft? MOORPARK CITY COUNCIL ACTION:/}e A-e-•.eZ dhA& AGENDA REPORT BY: k-vo� TO: Honorable City Council FROM: Deborah S. Traffenstedt, Administrative Services Director �5T Prepared by: Teri Davis, Senior Management A DATE: October 24, 2007 (CC Meeting of 11/7/07) SUBJECT: Consider Authorization to Sign Letter of Intent to Initiate Process for Adopting Flexible Spending Account Benefit BACKGROUND AND DISCUSSION The City of Moorpark (City) provides qualified City employees with a competitive benefit package and is desirous of maintaining such package. Periodically, the City evaluates potential benefits, not currently offered, to determine whether an advantage exists in adding it to the benefit package. The attached describes an optional 125 Flexible Spending Account (FSA) Administrative Services Proposal (Proposal) and, if adopted, would not only enhance the City's competitive benefit package, it would allow the City to be consistent with the growing number of cities offering a FSA benefit. FSAs are authorized under the Internal Revenue Code (Section 125) and provide participating employees with a vehicle through which certain out-of-pocket medical expenses may be paid using pre-tax dollars. Dollars are deducted from participating employee's paychecks, on a pre-tax basis, and deposited directly into a FSA. Participating employees designate the amount of money they want directed to their FSA account each year and that dollar amount must be used prior to the new calendar year. Any unused funds are considered forfeited funds and returned to the participating city to be applied to administrative costs. Benesyst is a FSA Administrator that handles nearly all of the administration (implementation included) procedures for its clients. Administrative costs to the participating cities are nominal. Once Benesyst provides enrollment services to an employee, the employee is issued a debit card to be used for certain expenses. These expenses can include costs relating to vision, dental, general medical, and prescription and over-the-counter drugs. It can also be applied to dependent daycare expenses. Benesyst also provides processing of all financial and claims data, a call center to assist FSA participants, internet access to FSA information, direct deposits, paper statements to participants (optional—increases costs, but statements are available online at no charge), employer reporting, compliance, auditing, and the development of the City's FSA Master Plan (Master Plan). Honorable City Council November 7, 2007 Regular Meeting Page 2 The Proposal describes the services provided in more detail. An Estimate for the costs to the City is attached and is based on a fifteen percent participation rate (i.e. fifteen percent of the current number of qualified employees employed with the City). The total set-up and communication cost to the City for the first year, assuming the FSA is implemented as early as possible, or March, 1 , 2008, is $1,945.92. Added to that is the flexible administrative fees, estimated to be $277.02 for a total of$2,222.94 for the time period of March through June 2008. Cost savings from currently budgeted benefits, from each Department,will be used to pay the estimated costs for implementing the FSA benefit for Fiscal Year 2007-08. Attached is a Letter of Intent to Benesyst, which is required to initiate the implementation of the FSA program for the City. The Master Plan, once it is developed by Benesyst, will be presented to City Council prior to the FSA implementation date for approval. City Council concurrence to authorize the Letter of Intent is requested. STAFF RECOMMENDATION Authorize the City Manager to sign and submit to Benesyst the Letter of Intent. Attachment: Benesyst Proposal Packet G00I-LSS ATTACHMENT benesyst Overview and Proposal For the Assumption of Flexible Spending Account Administrative Services Presented to: City of Moorpark On Behalf of: Debi Bennett Account Executive ABD Insurance& Financial Services Effective Date:3/1/2008 000189 bellesyst Our goal is to make this proposal as clear, friendly and readable as possible. For specific information,please refer to the contents below. Rate information is on pages 12-13 We look forward to helping you understand our services. About Benesyst 2 In this Proposal... 2 What distinguishes Benesyst from other Administrators? 2 FSAs at a Glance 4 Overview of Benesyst's Flex Services 5 Benesyst BennyTM Benefits Card 6 Participant Website 1 We Guarantee our Performance 11 Proposed Schedule of Fees for the City of Moorpark 12 Comparing the Benesyst Advantage 14 In Conclusion 15 000130 • City of Moorpark-Flexible Spending Account Proposal October 12 2007 FSA Administrative Services The Benesyst Advantage Overview and Proposal Experience You Can Trust More than 15 years experience in FSA October 12, 2007 administration and a client retention rate exceeding 97%speak to Benesyst's commitment to excellence. About Benesyst Next-Generation Debit Card Benesyst is about responsiveness.Successful health and welfare The Benesyst Benny'"Benefits Card can professionals across the country are choosing Benesyst for FSA and other be used for Health Care FSAs.The administrative services.With an Operations Center in Minneapolis,MN Benesyst Benny-not only provides and offices in Cincinnati,OH and San Francisco,CA, Benesyst has been instant reimbursement,it solves most administering Flexible Spending Accounts since 1988. We provide "pay-and-chase"problems by managing unparalleled service to employers and participants,invest in advanced supporting data directly from your technologies,are committed to fast,accurate and compliant carriers! reimbursement processes,and hire knowledgeable and friendly staff that provide unsurpassed participant and client care. The Fastest Payment of Manually Submitted Claims in the Industry Healthcare claims:(5)business days In This Proposal. .. Daycare claims:(2)business days. 1. We will provide an overview of FSAs and our administrative processes Caring Customer Support 2. We will provide our rates for implementing and administering the Participants and employers rave about our Customer Care Center FSA program representatives'ability to provide 3. We will provide the City of Moorpark an understanding of why complete and accurate information. Benesyst constitutes the best administrative value in the industry The Best Online Reporting What Distinguishes Benesyst from Other Participants Administrators? Have access to complete account information online 24 hours a day,7 days a week for convenient retrieval any time of the day. Benesyst provides conscientious,accurate administration that runs Employers problem-free. Have 24/7 access to reports including Employers come to us because of our solid account summaries,check registers and reputation for caring service,professionalism contribution reports-all easily delivered, in Microsoft Excel. - innovation and industry-leading performance on every • FSA key measure.We intend that our commitment to you show up in every aspect of our "/have been involved with employee benefit partnership. vendor selections for 25 years and the selection of your firm ranks as one of my best Conscientious administration of your Flexible Spending Account plan is decisions due to your professionalism and crucial to its success.The Benesyst system has evolved based on input customer dedication." • from hundreds of employers.Over the last decade,services have been refined based on continued input and new technologies to achieve the Tom Morin following key goals: Manager,Health and Welfare Plan Design Northrop Grumman Corporation Copyright©2007 henesyst 2 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000191 City of Moorpark-Flexible Spending Account Proposal October 12„2007 Benesyst's Administration is More Cost Effective The cost of FSA administration is based on two factors:administrative Increased Participation in fees paid less the payroll savings to the employer.The number of Dependent Daycare Leads to employees participating in the FSA program is the primary determinant of payroll tax savings(and therefore,cost or gains)for the Savings for'the City of Moorpark City of Moorpark. Increasing participation levels in dependent daycare can greatly enhance City of We have found that participant satisfaction is the most important factor Moorpark's tax savings.The table below affecting participation levels in the plan.That's why we reimburse illustrates the tax savings to a sample daycare claims within two(2)business days and Health Care claims employer with 225 eligible employees and an within five(5)days!Through surveys and feedback over the years we average of$333 contributed by each have learned the factors that inhibit plan participation. Here's how we dependent daycare participant per month: specifically address each key concern: "Generic" Benesyst 1. Employees fear the"use it or lose it"provision(forfeited Administration Administration contributions) %of Benesyst provides excellent enrollment and year-round Employees in 4% 5% communication materials online,on the phone and on paper. Program These communication materials,along with 24/7 access to Participants 9 11 account information enable and support informed,low-risk decision making. FICA and FUTA Tax Savings to $230.77 $288.46 Employer,per We provide a more convenient,more paperless debit card month(7.7%) solution which works healthcare transactions,all of which Additional Tax Savings,per effectively support lower risk and higher participation month,to employer with Benesyst $57.69 Administration 2.Employees fear slow reimbursement and the resultant cash- flow issues As you can see, just a 1%increase in Benesyst TM Benefits Card reimbursement is instant! dependent daycare participation leads to Benesyst's RapidPay system absolutely leads the industry in significant monthly savings,savings totaling claims turnaround time and ease of claims filing. more than$57 in this case. Benesyst recognizes that increasing The overall effect of addressing these issues is happier participants, participation greatly enhances employer tax more participants(especially in the Dependent Daycare FSA),and savings and provides a verifiable return on hence reduced net administrative costs for the employer;in short,a your investment. To increase participation, better win-win situation for the City of Moorpark.The table at the right Benesyst: clearly illustrates the cost savings as a result of Benesyst's • Provides dependent care administration. reimbursements immediately(within two business days)reducing participant Benesyst's Accuracy Eliminates Administrative Headaches • concerns about cash flow problems. Benesyst's unique audit protocols provide highly accurate results. • Pr Every claim received is audited by a highly-trained staff member to ovides excellent communication to participants so that they understand the. ensure IRS documentation requirements are met.This minimizes the important tax savings offered by need for rework,complaints and requests for the intervention of the enrolling in FSAs. employer's benefits or HR staff. • Provides a number of online resources Benesyst's Advanced Technology Translates into 24 Hour so participants have instant access to vital account information. Information Access Benesyst's enterprise-wide utilization of advanced technology and Benesyst has a proven track record of refined protocols enable us to exchange data efficiently,to report to increasing participation,providing hidden employees 24-hours a day via our website or InfoLine,and to process savings that most employers don't take into claims,payments and reporting efficiently and accurately. account when choosing an administrator. , . Copyright 0 2007 benesyst 3 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000192 • City of Moorpark-Flexible Spending Account Proposal October 12,2007 Benesyst Provides Peace of Mind That Your Data is Always Secure Our FTP server,128-bit encryption,firewalls,back-up protocols and About Flexible Spending other measures assure the integrity of the data and process results. Accounts Be n esyst n eve r sells or gives data to a n y outs ide entity for profit or any other form of advantage. • The employee pays expenses with pre- Benesyst Keeps You Informed tax dollars.Federal,state and FICA The City of Moorpark and its employees are advised and informed in a taxes are reduced. timely manner of legislative developments'plan requirements non- • Flexible Spending Accounts,by their discrimination test results and information required for government nature,significantly improve cash-flow form filing. and increase spendable income for participating employees. Benesyst Always Maintains Confidentiality As a matter of principle,and in order to ensure continued high • The program is completely voluntary participation,confidentiality is always preserved in claims processing. and provides desirable flexibility to Benesyst,an independent third-party administrator,protects employees employees. from privacy-related employee relations problems and the participation consequences resultant from internal administration. • Generally no net cost to the employer =Employer payroll taxes are reduced: both FICA and FUTA.These savings F SA B at a Glance generally exceed administrative expenses,creating an appreciated benefit program that operates on a Flexible Spending Accounts(FSAs)are made possible by the Internal cost-free or net gain basis. Revenue Code(Sections 105,125&129).Although the law establishing these code sections was passed in 1978,the first Flexible Spending • The plan,effectively communicated, Account programs were not implemented until late 1982,when clarifying helps attract and retain employees. regulations were released. • The 2007 limit for DCFSA is$5,000. Subject to certain IRS rules and restrictions,Flexible Spending Accounts The HCFSA limit is set by the allow employees to pay certain out-of-pocket expenses through an FSA employer. with pre-tax dollars.In addition to the employee share of employer- sponsored insurance premiums,employees may contribute toward certain "employer-sponsored"Flexible Spending Accounts.The most common types of expenses included in Flexible Spending Account programs are: • Un-reimbursed vision,dental and general medical expenses, "..,if you recall,employee satisfaction was at including most over-the-counter drugs an all-time low with our previous administrator and our office was overwhelmed with • Dependent daycare expenses complaints. The complaints have turned to compliments especially with the speed and Expenses paid through a Flexible Spending Account are not subject to accuracy of the claim reimbursements." Federal,state or FICA taxes.This results in increased spendable income for participating employees.The employer pays no share of FICA taxes Steve Richardson or FUTA taxes on earnings that participants redirect to an FSA.This Assistant Director,Human Resources reduces payroll expenses,in turn offsetting administrative service fees City of Rochester and more. Copyright 0 2007 benesyst 4 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000193 City of Moorpark-Flexible Spending Account Proposal October 12,2007 - Overview of Benesyst's Flexible Spending Rap1dPay Af l ows Benesyst to Account Administrative Services Pay Claims Faster Than Other Following is a general overview of the services,which,if Benesyst is g� g , Y Administrators selected,we propose to provide City of Moorpark: Complete Takeover and/or Enrollment/Re-enrollment Services What is RapidPay?To put it simply,our RapidPay system means participants will The City of Moorpark will receive training and useful FSA Administration receive their reimbursement checks faster Manuals that contain organized information regarding implementation than other administrators. steps,a timeline,and FSA reference information including procedures for enrolling new employees,filing claims,handling terminated employees as Benesyst guarantees that healthcare claims well as file specifications,sample forms and worksheets.The City of will be paid in five(5)business days and Moorpark will also have a designated primary operational contact as well dependent care claims will be paid in two(2) as comprehensive contact information for every relevant function at business days. Benesyst.Benesyst will: In 2006 and through 2007 the average • Manage the takeover of all contribution,disbursement and pended healthcare claim was paid in under four(4) claim data from the current administrator days and under two(2)days for dependent • Communicate the change of administrators to all participants care.Coupled with daily disbursements, • Provide all participants everything they need to begin using Benesyst, Benesyst's RapidPay system truly is an the Benesyst website and the Benesyst InfoLine,as well as all industry standard. customer service functions Benesyst's RapidPay system processes and • Manage all future re-enrollments in conjunction with and according to disburses reimbursements on a daily basis. the City of Moorpark's systems,as agreed There is no schedule or cut-off dates with RapidPay. Claims are continuously Prompt Processing of Financial and Claims Data processed as they arrive,making the whole Under our RapidPay system,claims are processed,disbursed and mailed process quite stress-free for anyone filing a manual claim,or for those groups choosing (or ACH transferred)within five business days for Health Care not to utilize the Benesyst Benny'"`Benefits Reimbursement claims,and within two business days for Dependent Card,which of course reimburses instantly, Daycare Reimbursement claims,from the date we receive the claim.This Y , securely and nearly paperlessly. is an industry-leading standard. . At Benesyst,we take great pride in the Participant&HR Call Center speed and accuracy of our RapidPay • reimbursement process.Our RapidPay Benesyst is recognized for providing superb person-to-person help.Our system was carefully conceived and Customer Care Center administrators are highly meticulously refined thanks to input from trained experts in FSA administration who are � ��T�..,, p human resources representatives and ` delegated the authority to make any change compliant participants and translates into industry- with plan provisions and the law,on the spot. leading turnaround times for participants. • Our toll-free Customer Care Center available from 8 a.m.to 6 p.m.CST.The Customer Care Center provides award-winning support services including: • Explanation of how the benefit program works,how benefits compare, decision support,plan details and how claims are submitted and reimbursement is made;Explanation of covered and non-covered items; • Explanation of how a claim was processed and why a particular claim was denied;Resolution of claims paid and facilitation of claim disputes; • Explanation of debit card usage,substantiation and card issuance; • Provide fulfillment support for any necessary forms not found on the website.Answer questions about accessing and using the website. Copyright 0 2007 Benesyst 5 Confidential--Not to be used,duplicated or distributed . • without Benesyst's prior written consent. 000194 City of Moorpark-Flexible Spending Account Proposal October 12,2007 Visionary Debit Card Technology(Optional) The Benesyst Benny'•T' Benefits Card solution for Health Care FSA provides participants with a convenient reimbursement option that results in a measurable return on your investment.Studies have shown that participation generally increases by at least 10%once the card is implemented,while actual contribution levels see a 10%to 20%increase, t _a thus generating increased tax savings for employers. catel It largely eliminates a lot of the paper and accuracy problems commonly associated with debit cards.The Benesyst Benny"' Benefits Card is seamlessly integrated with our claims reimbursement platform and has run error-free. The card utilizes extensive carrier connectivity for automated claims adjudication. Where there is no connectivity,the system can be programmed with the copay amounts to further automate adjudication.The result is a platform that can automatically and paperlessly adjudicate between 60%and 90%of claims,depending on the level of carrier connectivity,saving participants and,inevitably,employers, Most Paperless lots of hassle. Debit Card Solution IIAS Participating Paperless Merchants Through an advanced level of automation, Through Participating Paperless Merchants using the IIAS system,you we ensure that all claims are adequately can use the Benesyst Benny"' to make purchases paperlessly.This means adjudicated.We ensure that no payments are made for ineligible items by using the you do not have to send in documentation for the purchases you make. following intelligent features: IIAS-enabled vendors will automatically allocate anything eligible for FSA reimbursement to your Benesyst Benny'"'.They will then ask you for an • Participating Paperless Merchants alternate source of payment for the non-FSA-eligible items you purchase. IIAS (Standard) You just pay for your products and walk out.The IIAS system saves all A merchant based validation where the merchant flags FSA eligible items at the the records.It's easy! (Note:it's always advisable to keep your receipts.) point of sale. Current Participating Paperless Merchants(IIAS System) • Carrier Provided Backup(Optional) Drugstore.con Waigreens Wal-Mart Stores Sam's Club Connections with over forty major carriers provides substantiation rather Merchants targeting implementation on or before 1/1/2008 than having to contact the participant to •ACME •Albertson's •Bigg's • Brookshire request it. • Co-pay Matching(Optional) • Buehler Food •Carrs •Cub Foods • CVS 1 Caremark We have the technology to load the client's co-pay information and •Dominick's • Farm Fresh • henuardi s •Giant Eagle automatically adjudicate claims matching •Giant Food • Harinaford Food • Harris Teeter •Hornbachers your co-pay rules for paperless,yet compliant,reimbursement. • Vey • • Kroger ors g's Our enterprise-wide auto-adjudication rate is • Lucky • Meijer • OSCO • Pak'n Save 82%,of all debit card swipes. What this means is that,on average,only 18%on debit • Pavilions •Price Chopper • Randalls •Rite Aid card swipes require documentation. •Safeway •Shaws •Shop& Save • •Shoppers •Star Market •Stop&Shop • Sunflower •Sweetbay •Target •Tom Thumb •Tops Pharmacy •Vons Copyright c 2007 benesyst 6 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000195 City of Moorpark-Flexible Spending Account Proposal October 12,200 7 r Participant Internet Access ,.,,, Online FSA Claims Wizard Participants have ongoing online access to .;� m their FSA information.All areas `.. J:` Step t Go to t+p Online...h1v.ir1 n displaying personal information are benesyst ' p ,:. . . secured via industry standard 128-bit Verisign certificates. We use a strong ,b °• dWjlA ;ohs'SN Swia - '� 1 y. eyr—r4ar 0, 'r. .;,ate password for all login credentials. aw N Instant Summary Information .� °� j WNW...U,.i..AwrMw.:K.._ Participants can securely . . ti y .... 11.1.4...tiuue a...it ...1,:.... > ..,a.mw+x'oan ix a 1¢ f— caa:an»r view the following _ .. ,.-a'.-i'.:_.. 'v �.•Mf,.M....Wwn Ntlw.a WsP K.A::i'.w t; individual"instant C1.on 4ea ee . r °; Der.F" 411 CIai.Ri r�:�a: ��_>�; .w, summary"information by ��1� _.:.._ . a.._....+...:.-.tea......... a 5!:.. .. ,u :..:.,... plan: Online FSA Claim Wizard for literally guides Annual election amount the participant,providing instant feedback • on whether an expense is eligible for • Year-to-Date Contributions reimbursement–while in the process of • Claims Received Year-to-Date entering the claim. • Claims received for this plan year sr� c41h��t tr1 �3n�[1a� 1m. • Claims paid for this plan year ._ �a. _ • Unclaimed Balance • A real-time display of the most recently processed claims. .' ,: Historical Claim Information • c111 In ,� . Additionally,participants have complete access to real-time and historical �-� = ° claim information,including a line-by-line detail of each claim processed,a c¢1.F.x. : real-time disbursement record and detailed denied claims. Claims In Progress Employees will see a convenient box 'Ft,:e kecritreil Fast%I:tilYts illustrating the most recent five The system prints a claim form/fax cover claims received by Benesyst. The the participant can use to fax their receipts box features a"meter"next to the , ..E a ,,:: . to Benesyst ensuring rapid processing and received date of any claim not jt,, .;ai 0'A�-o, O...... A..... - eliminating the need for a Social Security already paid.If the most recent _} a �� �1 number on the fax. claim is still in process,the"meter" ` 1 Step 3 use automated tax cover, et Cr shows which stage of processing it's in. So the participant always knows online upload to Amin documentation. their claims status. - That's it! ,,,,.kd.. its.t;..0..1,K.aa.C.4•C+Wf........+1'.. .. ' ar.�c�. xw:;sartwscxe �a Reference Materials and Plan Documents _ Vt. , 3 se ro. Plan participants also have access to the following documents,in PDF '" '" form,online: °' t L • Our complete enrollment book,including detailed lists ofQEj�I reimbursable and unreimbursable claims . _ _ , iii t , ;. • Claim forms , • Automated FSA Tax Savings Calculator °"'`:` Nwroa .4.... �� or _4. • Over-the-counter drug eligibility guide .n ,,0.0 Dependent care Provider-Direct-Pay authorization form F • �S�;y�t;A.>Fjt:,S sa�1�s�,ri.2;W:�g�r�+�1�rr;ii��.? w wit tot fat Sato tt3'11 mix, *;fax Copyright©2007 benesyst 7 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. ` 0001.96 City of Moorpark-Flexible Spending Account Proposal October 12,2007 24-Hour InfoLine Access Instant Management Benesyst offers our voice response system,InfoLine,24 hours a day,7 days a week.Participants can utilize this toll free system to retrieve Reports for the general information,as well as the following specific information: City of Moorpark • Annual election amount • Claims submitted 5 :' To make your job easier,Benesyst 3•� • Claims paid '" provides a number of standard reports to the City of Moorpark for no extra charge. • Balance to be claimed by plan-year-end These include: • Most recent claim received • Most recent claim paid Account Summary • Most recent paid claim date Available on our web site,this detailed summary shows year-to-date contribution,disbursement and balance Direct Deposit(ACH)or Paper Check information for every participant. Participants can choose their method of payment.With AutoACH,City of Moorpark can automatically have claims paid by direct deposit to all Check Register employees who receive their paycheck from the City of Moorpark's payroll Available online,the check register,as its system by direct deposit.This eliminates the need for direct deposit name implies,shows a detailed list of authorization forms,voided check samples,etc. every check and ACH issued. r`,. u n "� "` Each check includes a Contribution Report Available online,this report lists each complete Explanation of individual and their contribution for the Benefits(EOM.Those who pay period requested.This report can also receive a direct deposit be sent by e-mail with a confirmation that reimbursement also receive a the contribution was successfully voucher at their designated imported. residence address indicating } ,..z �;.: that the ACH transfer was Non-Discrimination Testing Benesyst will perform non-discrimination = r� made to their account along °s testing(at no extra charge)to ensure � with an EOB. compliance with IRS regulations.We will then provide a complete report detailing the results;if any failures occur,remedies will be suggested. Quarterly Statements Available to all Participants Forfeiture Letter and Reports Quarterly statements can be mailed by Benesyst to the participant's At the close of the grace period,Benesyst address by First Class Mail.In addition,participants may receive a special will prepare a forfeiture letter and year- year-end warning 30 days prior to the end of the plan year to help end report card detailing any plan minimize unnecessary forfeitures. forfeitures. Robust Employer Reporting IRS Form 5500 Benesyst provides a complete complement of standard easily understood Benesyst will complete(at no extra charge)and submit to you IRS Form 5500 treasury/financial,banking and plan reports on either an electronic or so that you may file it with the IRS. paper basis,as agreed.Benesyst will also prepare a signature-ready IRS Form 5500 for review by your auditors,if desired,at no additional cost. Best of all,all our online reports can be Please see box at the right for an overview of employer reports available. easily sorted by desired fields and can be exported to Microsoft Excel with a simple Our standard reports are exportable to Excel for data manipulation.In mouse click. addition to our comprehensive standard reports,Benesyst also has the ability to create customized reports at our customer's requests. Examples of these reports include specific employee statement reports,contribution (per payroll date)reports,and Master Employee listings(which includes Copyright 0 2007 benesyst 8 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000197 City of Moorpark-Flexible Spending Account Proposal October 12,2007 all employee demographic,payroll,election and status).Benesyst will be happy to discuss your specific reporting needs.We are confident that we Benesyst's Experience can accommodate any reporting request concerning their FSA program. Benesyst has over 14 years experience in Benesyst Keeps Your Plan in Compliance with the Law providing Flexible Spending Account Services. Benesyst adjudicates each item of each claim line-by-line,verifying that each submitted expense is eligible and qualified for reimbursement. Each It has been gratifying to the committed, item is then available to view online at any time.Among the items innovative people of Benesyst that many examined in the adjudication process are the expense incurred date,the Companies have entrusted their most submittal date,the type of expense and the supporting documentation.We sensitive administration functions to also check for duplicate submissions,etc.However,our goal is to pay the Benesyst,creating significant growth for claim,if possible.Benesyst makes every effort to quickly resolve claims in our company without significant which information is unclear or missing, advertising or the disruption and culture damage of incorporating acquisitions. Each delighted client helps create new Benesyst also manages plan document and eligibility/changes in ones. Our client retention rate has been compliance with the law.We provide plan document update services for all an exceptional 97+%per year since we plans for which we have generated the original plan document.In cases began measuring in 1996. In 2006 it was where the employer has provided the document,we provide advice of any 98%. necessary change.Also included in Benesyst's services is all federally required non-discrimination testing as well as the preparation of a Current California Government Clients signature-ready IRS Form 5500 for review by corporate auditors. Include: Aggressive Internal Auditing • City of Camarillo One hundred percent of claims are audited to minimize error and rework, • City of Chino Hills a huge time-saver for HR Departments.Benesyst also provides a complete • City of Cypress audit trail,including all contributions and disbursements.This simple • City of Diamond Bar process,time consuming to us though it may be,endears us to both the • City,'of Fairfield benefits/HR staff and the participants by dramatically reducing the • City of Hawthorne number of errors.Benesyst accurately archives and maintains all plan • records for the legally required period(currently seven years). City of Hesperia • City of Indio � Multiple Employer Facilities • City o f Inglewood Benesyst serves clients with locations from coast to coast.Companies, • City of La Palma subsidiaries,sectors,business units,divisions,branches,departments, • City of Los Alamitos field offices,etc.may be accounted for separately,together or in groups • City of Manhattan Beach per management's desire.There may be one or multiple employer mailing • City of Monterey Park addresses,as agreed.Benesyst is generally able to accommodate most City of Murrieta •information management requests. City of Redondo Beach •Plan takeover,enrollment or re-enrollment may be conducted by a • City of Santa Clarita Benesyst enrollment specialist or utilizing a Train-the-Trainer program • City of St.Charles for divisional HR or benefit managers.Alternatively,employers may use • City of Thousand Oaks our Online FSA Enrollment tool or enroll more simply using our • Contra Costa County— comprehensive enrollment booklet.Benesyst can also customize IHSS Public Authority enrollment tools to fit in as components of an overall or"theme"benefit enrollment system developed by the employer or their advisors.Once the • Golden Gate Bridge,Highway& best enrollment tools are selected for the environment,distance is no Transportation District obstacle to plan success. • Mesa Consolidated Water District • Santa Barbara County Air Pollution Control Copyright r. 2007 Benesyst 9 Confidential--Not to be used,duplicated or distributed without Benesyst's prior written consent. 000198 City of Moorpark-Flexible Spending Account Proposal ,12 2007 our Communication Materials Get Results i Effective Participant Effective communication of the program to the City of Moor ark's o t11 u n I C atl o n p g Y Moorpark's is clearly important to plan success.Employees need to understand all of the plan's advantages and risks,as well as how it affects Benesyst believes an informed participant is a satisfied participant.To effectively them personally.Benesyst has a great deal of experience in communicate account information, communicating these benefits.Benesyst will provide all appropriate Benesyst has designed a number of informational and enrollment materials,conduct employee meetings communication pieces to keep your (optional)and/or develop other effective communications for the employer, employees informed.These include: as agreed. Prior to Enrollment: tezlbis � c. arifs Enrollment Brochure F Iex!,tits lax Break You Can't Anvil i to!R .& ,fir t..;'• �7_~14 Benesyst will provide an enrollment raa4,t; r. brochure for each eligible employee(bulk shipl)ed to company headquarters).This :::---z;-:.---*";':.:':1.- Emr la a F u temt�* " ` brochure provides an overview of the ` " . " ` '�z= --.. advantages of an FSA,simple worksheets "A'"-"A'"' Welcome} *- fr , and instructions on where the employee . '. � can find more information. ....a..4,...... tea. Flex Booklet aft( is n........00.,...,,,,,......4"....4....-.....'.as ,a+s.o-=a,n agar .� w ' ��...i...�s�r. • � - . a .... �:.r. . Ja .9 4g.: , , ''. ..� Optionally,for an additional charge, :,? Benesyst's 14-page,four-color Flex Book SadW'^' can be bulk-shipped to company '' - headquarters and given to each Setting the Most Out of Your ': participant.It is the source for all Flex Flexible Spending Account(FSA) w, B» '14,144. information related to their account and is , ,;�, -.� an invaluable resource during the ....�a"> Y�r ts,77,,,::, '.:,}, : s, .+era: ....,.....................,...4„,...., be►nesy?,fit enrollment process. After Enrollment: `'',, fa. Confirmation Letter .: ".w,: "". -K To ensure we've imported the proper ,, �-; `. ;. flexible Spending Accounts arts elections,Benesyst can send out a * lie--- .,,.,...- - '7..,... belles. el,}„,td 1,, A k[,,4,, f.r.Mt t.L s?.`....+'{`4 a confirmation letter showing the election ir 1%- amount(s).Included in this mailing(which ' ;' .: x ` -- can be sent to company headquarters or .v,- x' - � to the individual participants-see the fee _ . ' schedule for pricing). y” A.ccou nt Statements&30-D)ay Notice Quarterly and 11-month Statements- ....4 benesys , - Benesyst can prepare and mail to each 4 individual Quarterly and 11-month ' = statements detailing account balances, 43 r ensuring participants are informed of any 1,,--,- -,.,`L,> J remaining balances. ' µ EOBs-EOBs are included with each 4 check or direct deposit we send. ben s v>sd Copyright c 2007 Benesyst 10 Confidential•---Not to be used,duplicated or distributed without Benesyst's prior written consent. 0001-99 City of Moorpark-Flexible Spending Account Proposal October 12,2007 We Guarantee Our Performance Benesyst guarantees its turnaround time to be within five business days,its claims and financial accuracy to be in excess of 99%and its customer service to be caring and responsive.We guarantee that,if there is a problem,we'll fix it as well as institute steps to prevent a like occurrence in the future.If we fail in any given month,we will provide the City of Moorpark with a credit of 5%of our standard monthly service fees for the affected month.If the same problem persists into a second consecutive month,we will provide a credit of 10%of our standard monthly service fees for the affected month and for all affected months thereafter until we fall within the parameters of our guarantee. Performance Standard—FSA Implementation Target 1. Initial Participant Data Accuracy/Contributions >99% 2. Initial Data Accuracy/General (Name,Address, etc.) >98% Performance Standard—Call Center Target 1. Telephone Answer Speed—The average time it takes Benesyst to answer phone 90% in <30 calls: seconds 2. Telephone Abandonment Rate—The percentage of calls abandoned before response <5% by Benesyst: 3. Call Back Performance—Percentage of all calls will be returned within 48 hours: 90% Performance Standard—Account Management Target g g 1. Account Management-All client personnel phone and email inquiries will be 99% returned by Benesyst within 24 hours. 2. Account Management-Benesyst will provide the client primary contact with an Satisfactory or annual survey rating our customer service. If we fail in any area,the fee reduction Above above will be applied. Performance Standard—FSA Target 1. FSA processing accuracy—percentage of FSA payments processed accurately the 99% first time(based on information supplied by the employer or its advisors): 2. FSA claims payment turnaround time from date of receipt to date of payment in 95%within 5 days business days: 98%within 8 days 3. FSA Reporting All FSA reports will reflect accurate data (based on information 99% provided by client and its advisors) Copyright 0 20(}7 .44 benes Vst 11 Confidential—Not to be used,duplicated or distributed without Benesyst's prior written consent. 000200 City of Moorpark-Flexible Spending Account Proposal October 12,2007 Proposed Schedule of Fees for the City of Moorpark Benes Y Comprehensive Com rehensive Services Offer Outstanding Value Assumptions Benesyst is committed to providing the Effective Date: 3/1/2008 Eligible Employees: 60 best value in the industry.Listed below are Healthcare Accounts: 12(estimated) Daycare Accounts: 6 (estimated) the services you receive for each of the Proposal Expires 60 days from date of issue items listed on this proposal. Implementation Fees Included in the Initial Plan Communication p fee are: Comprehensive Plan Design and Set-Up: $750 • Initial Administrative Set-Up • Enrollment Brochure First Class Service - Monthly Fees • Online and IVR Participant Data Comprehensive Healthcare and Daycare Access Administration with Ra ic/Pa y, per account, per $4.28 Online Booklet and Automated Tax p Calculator month: • Call Center enrollment services Benesyst BennyTM Benefits Card per participant $0.90 per month (Optionah: Optional post-enrollment communication include: Annual Employee Enrollment Support and Communication • A confirmation letter detailing all Call Center, Online& IVR Enrollment Support Access Including: account elections as well as Benesyst • All Call Center(customer care/informational) services related to FSA enrollment contact information; for all eligible employees prior to and during enrollment and the plan year These communications can be bulked- • Online reference resources and tools including: FAQ's,Automated Tax-Savings shipped to company headquarters or Calculator,Election Calculation Worksheets, and general informational and mailed to each participant's home. communications materials in PDF Form (continued on next page) • Enrollment Brochure for each eligible employee bulk shipped to company headquarters Per eligible employee(billed once annually): $0.75 Participant Setup and Confirmation Letter: Enrolled Participant set-up including Online Portal and IVR Account per participant charged once annually: $1.50 Printed Enrollment Confirmation Statement $0.88 mailed to each participant per statement: Quarterly Statements Quarterly and Year-end Statements&30-day Notice, per statement: $0.88 Copyright©2007 benesyst 12 Confidential--Not to be used,duplicated or distributed without Benesyst's prior written consent. 000201 I . City of Moorpark-Flexible Spending Account Proposal October 12,2007 Optional Services • (continued from previous page) Plan Documents Update/Restatement of Plan Documents $490.00 Benesyst's carefully conceived Direct Deposit administrative services provide participants and employers with everything Direct Deposit Reimbursement with mailed voucher per account needed to ensure plan success.Our per month: $0.25 monthly service fee includes: Direct Deposit Set-up, (via paper form per form processed): $1.70 Our industry-leading RapidPay system guarantees we'll process Additional Enrollment Materials Bulk-Shipped healthcare claims within five(5) FSA Enrollment Brochures $0.34 business days and daycare claims within two(2)business days.Checks FSA 14-Page Participant Book $1.40 are cut daily(not weekly or monthly) ensuring industry-leading turnaround Miscellaneous Services times Enrollment Meetings $375.00 per • Processing all enrollment changes and half-day plus terminations(eligibility files) expenses • Online access to FSA Summary and detailed claims and contribution Scrub/formatting charge(for files not meeting our file history for convenient account specification), per file; and customized, ad-hoc reports or information access audits, minimum one hour upon advanced approval by City of • FSA Call Center Services by our Moorpark friendly and knowledgeable staff • Interactive automated telephonic • FSA Administrator completing request, per hour: $75.00/hour access to FSA summary data for 24- hour account information • Management and/or IT completing request, per hour: $150.00/hour • Daily line-by line accurate and consistent claims adjudication with mailed paper explanation of benefits (EOBs) • Disbursement reporting online—easy viewable,printable and downloadable contribution,disbursement(check registers)and YTD reports with all date ranges; • All non-discrimination testing,IRS Form 5500 preparation,year-end FSA Plan Report Card and other required services We make annual renewal a snap.Here's what we'll provide: • Online access to our enrollment materials including in-depth FSA Information and tax calculators • New plan year set-up • Updating of IVR and online access Copyright 0 2007 benesyst 13 Confidential---Not to be used,duplicated or distributed without Benesyst's prior written consent. 000202 City of Moorpark-Flexible Spending Account Proposal October 12,2007 Comparing the Benesyst Advantage Exceptional Customer Service 24-Hour Internet/Online Non-Discrimination System Providing Testing Information on balances as Full written results& well as recent claims consultation provided Annual Re-Enrollment Capability to Services Concurrently Manage Continuation Administration Confirmation Letters Prepared for each participant Large Claim Financial Management Speed of Dependent Care 100%Audit Rate on Claims Paid Claims RapidPay ensures 2 business days! Timeliness of Health Care Claims Paid 24-Hour Interactive Voice RapidPay ensures 5 Response System Provides Communications! business days! information on balances as well Posters,payroll as recent claims stuffers,customized memos,remote location kits,customized enrollment forms, enrollment kits �M1 11r II II Copyright c 2007 benesyst Confidential--Not to be used,duplicated or distributed without Benesyst's prior written consent. 002 0 3 City of Moorpark-Flexible Spending Account Proposal October 12,2007 In Conclusion We hope you consider our proposal to provide quality, dependable FSA.administrative services. We are excited about the opportunity to enhance your FSA administration with you and your advi ors,and cordially invite your inquiry with respect to any aspect of thi Upon acceptance, an administrative services agreement wil be prepared for your review and s . On behalf of each of our administrative staff,we look forward to the p of serving the City of Moorpark. Sincerely, CO/reiff Rob Coabn.CEO(6/2)746-3y0/ Benesyst, Inc. 800 Washington Avenue North 8th Floor Minneapolis, MN 5540I Phone(612)746-3133 Toll-Free(O77)25l-998I Fax(612)338-7969 Toll-Free Fax(800)310'8279 www.benesystnet Copyright 200' benesyst 15 Confidential—Not to be used,duplicated or distributed without Benesyst's prio written consent. ������������ ~�~^.~~~ _ ~~ ,i4, benes.yst Estimated First-Year and Second-Year Fees for City of Moorpark Assgmptlbn» Eligible employees 60 Daycare,participants 6 (Estimated at tofu) Healthcare Participants 12 (Estimated at 20%) Total Participants 18 #rmplementetiil€3 Fees Comprehensive Plan Design and Setup: $750.00 Per Account lkrtr hly Fees per month Monthly Fee Annual Fee Comprehensive Healthcare and Daycare Administration with RapidPay, per account, per month $4.28 $77.04 $924.48 Direct Deposit Reimbursement(with mailed voucher for each direct deposit)per account per month(Optional) $0.25 $4.50 $54.00 Debit Card Fee, per Healthcare account, per month (Optional) $0.90 $10.80 $129.60 Annual E'nrolfine t Support Setup and Communication Per Eligible Employee Annual Fee Enrollment St port-billed once annually $0.75 $45.00 Participant Setup and Post-Enrollment Com unicalion per Participant Fee Annual Fee Options* System Set-up for each FSA Enrollee-billed once anually $1.50 $27.00 Confirmation Statement per enrollee $0.88 $15.84 Total Annual Fee Debit Card Fee Total With Debit Card Total Est.Year-1 Fees With Set-up and Communications $1,816.32 $129.60 $1,945.92 Total Estimated First-Year Administrative Fees $978.48 $129.60 $1,108.08 Total Estimated Year-2 Fees With Communications $1,066.32 $129.60 $1,195.92 Total Estimated Second-Year Administrative Fees $978.48 $129.60 $1,108.08 © tional Services Fee Estimated Annual Cost Plan Documents Update/Restatement of Plan Documents $ 490.00 $0.00 Quarterly Statements Quarterly and Year End statements, per statement $ 0.88 $63.36 Page 1 City of Moorpark FSA Fee Estimate 10.12.2008 henesyst aion ea iiu, a0 5JA3I (S77) 25l-998I /8�'j) �l3-8�79 �a� wwvurauszsrmsz Letter ofIntent The City of Moorpark agrees to engage Benesyst, Inc. ( to provide Flexible Spending Account Administration for the plan beginning March 1, 2008, for its employees and their eligible dependents. The City of Moorpark agrees to allow access by Benesyst and its affiliates to the City of Moorpark's designated team for the purposes of implementation and ongoing administration. The City of Moorpark agrees{o fully cooperate with Bcucxygand its affiliates tofacilitate the transfer of employee census data toBencayxt`esystem. Total fees for implementation and ongoing administration for the entire plan year will beio the amount proposed and agreed upon. The City of Moorpark agrees both Benesyst and the City of Moorpark will work diligently to finalize a formal Administrative Services Agreement within 3Odays after executing this Letter ofIntent. Under the terms of this agreement Benesyst will begin implementation work necessary to deliver services on the agreed upon date. The City of Moorpark agrees to pay the quoted implementation fees if services are cancelled at any point during the implementation process. This Letter of Intent will begin these administrative services effective This agreement will stay in effect until uupccccdcd by the Benexyot/\drniniobutivc Services/\&recnucnt. EMPLOYER NAME: Client Name: City of Moorpark Beneo ut Inc. By(signature): Name(print or type): Rob Contin Title: CEO Date: Bmmmaymt Inc. -800 Washington Avenue N, 8`' Floor- Minneapolis, 88N 55401 '(877) 251-9981 o0o2(',,C